A plasmid containing the major late promoter was assembled into nucleosomes in a Xenopus oocyte extract, isolated by gel filtration, and found to be refractory to transcription initiation in vitro. However, exposure of the promoter to HeLa nuclear extract or to a mixture of isolated transcription factors prior to nucleosome assembly prevented nucleosome-mediated repression of the promoter. Inactivation or elimination of the TATA box-binding factor (TFIID) abolished the ability of these treatments to preserve promoter function. Preincubation with TFIID alone prevented repression and resulted in TFIID being sequestered into the nucleosome-assembled templates. Preincubation with all the transcription factors resulted in the assembly of nucleosome templates containing a near complete preinitiation complex, which required only the addition of TFIIE for transcription initiation.